Development cooperation with middle-income countries

Abstract

Only flows to countries that are on the DAC list of recipients can be labelled Official Development Assistance (ODA). The countries on that list however are a mixed bag. Based on a World Bank classification, the DAC list for instance includes Burundi, with an income per capita in 2009 of $150, and Brazil, with an income per capita in 2009 of$ 8840. Burundi, on this count, is 59 times poorer than Brazil. And there is not just income. Burundi is small, landlocked, politically and institutionally unstable, with an unimpressive record in terms of economic growth, a modest player in Africa and an insignificant player in the world. Brazil by contrast is huge, rich in natural resources, technologically sophisticated, growing fast, ambitious, and a major player on the world scene. Recently, it has even started to think about setting up its own aid agency (The Economist, 2011a). How more heterogeneous can one get? One can pick similar contrasting pairs from the DAC list, such as DRCongo and China, or Niger and India. How much aid, in pursuit of which development objectives, addressing which constraints in which sectors, using which modalities and channels: surely no single strategy can fit such dissimilar realities. What constitutes a sensible donor strategy in one country may be very inadequate in another. A differentiated strategy is called for.